YEAR IN REVIEW: If 2020 saw Southeast Asia workplaces migrate from analogue to digital environments at a pace that accelerated by as much as a decade, the year 2021 saw a region where digital disruptions have become just part of the new normal.
Artificial intelligence, big data and emerging technology played an increasingly important role in boosting business performance for organisations and in turn, influenced the way HR was managed within the region. With the parameters of digital transformation now on reset, it is expected that the focus on accelerated digitalisation will carry well into the next year at the least.
Asialink Group CEO Penny Burke described the phenomenon as a digital boom. “Southeast Asia is undergoing a rapid and unprecedented digital transformation, driven by rising consumer classes, a strong start-up sector, cheap and accessible devices, and youthful, tech-loving populations who have embraced e-commerce and social media.
“The region has become the largest adopter of Facebook anywhere in the world, and Jakarta, the capital of Indonesia, has earned the crown as the global Twitter capital.”
Consider the other favourable demographics Southeast Asia offers to sustain this claim: The 10-member countries that form the Association of Southeast Asian Nations (ASEAN) are already equivalent to the fifth largest economy in the world. The regional economy is expected to grow by over 5% per year over the next decade, well above the global average.
Facebook and Bain & Company’s SNYC Southeast Asia report revealed that since the start of the pandemic, 70 million people have become digital consumers – the equivalent of Thailand’s entire population.
Research by Google estimated that around 3.8 million new users across Southeast Asia will continue to come online each month into 2022. Almost eight in 10 people (78%) among Southeast Asia’s population of 15-year-olds and above will be digital consumers by the end of 2021, with the strongest growth expected in Indonesia. The region’s online retail penetration is also projected to have grown 85% year-on-year by the end of this year, and is now larger than the same markets in India and Brazil.
The disruptive changes brought about by the pandemic also saw several Southeast Asian companies expedite their operations. They moved from being relatively labour-intensive and low value-added bases to higher-value manufacturing production that fostered the development of the high-tech sectors.
Moreover, the disruptions are expected to relegate many jobs to automation, resulting in some occupations becoming obsolete. This is particularly true for companies that faced acute labour shortages during the lockdowns. They resorted to technology solutions to continue operations, manage risks and epidemiology, and even cut costs.
Vietnam’s Woodwork producer Truong Thanh Corporation, for example, discovered savings after realising that 48 hours of technology could do the work that used to be done by 2,000 workers over the same time period.
Growing from strength to strength, Southeast Asia leads Asia-Pacific’s digital transformation. The region is already home to over 7,000 startups, one of the world's largest concentrations. Of these, 80% are based in Indonesia, Singapore and Vietnam.
A growing number of these nascent companies have attracted global investors and achieved the exalted “unicorn” status in the billion-dollar club.
Singapore, which has a robust startup scene, was home to at least five unicorns at the start of 2021. These were the ride-hailing company Grab which recently proposed a USD 40 billion initial public offering valuation, online gaming, e-commerce and digital financial service provider Sea, online shopping platform Lazada, tech giant Razer, and retail shopping platform Trax.
Indonesia still holds the record as the country with the most significant number of unicorn companies in Southeast Asia, with six unicorn startups as of June this year. These were: Gojek, an online-based transportation and logistics service; Tokopedia, an online marketplace with a Customer to Customer (C2C) business model; Bukalapak, another C2C online marketplace; Traveloka, a transportation, hotel, and leisure ticket booking platform; OVO, a technology-based digital and financial payment application (fintech); and JD.id, an online marketplace with a Business to Customer business model.
Vietnam’s tech firms have also attracted investors, if not international media exposure. Its online gaming company VNG, achieved the unicorn’s billion-dollar valuation mark long before Go-Jek or Grab.
Against this backdrop, the competition to find and retain quality digital talent has become fiercer. Already a challenge even during the pre-pandemic years, talent acquisition concerns are compounded by emerging technologies that are dramatically shaping the ever-shifting digital economy. HR professionals realised that modern technology recruitment meant they need to go beyond skill development to seeking talents who have “transformation leadership,” and the innate ability to challenge the status quo.
International consultant Korn Ferry estimated a shortage of 47 million tech talents by 2030 in the Asia Pacific region. PricewaterhouseCoopers (PwC) found in a survey that more than 50% of Asia Pacific CEOs said it was difficult to hire digital talent with the right skills.
In the book The Transformation Myth: Leading Your Organization Through Uncertain Times, Deloitte leaders and authors Rich Nanda and Anh Nguyen Phillips observed that the most successful organisations that were able to thrive during the pandemic shared this common characteristic: they retained and attracted desirable talents through their culture.
They observed that digitally mature organisations that have invested in employee learning and growth and have created engaging work environments are better able to retain their valuable human assets than other businesses.
This feature was extracted from Chief of Staff Asia's report on 2021 in Review: Talent back to the forefront. For further coverage, and access to the full report, please see any of the below links:
2021 in Review: Talent back to the forefront (full report) December 23, 2021
Talent returns to the forefront of HR agendas (news highlight) December 24, 2021
Labour shortages demand new retention strategies (feature) December 27, 2021
Workplace restrictions squeeze talent further (feature) December 28, 2021
Digital disruptions became the norm (feature) December 29, 2021
Looking back at HR Technology in 2021 (feature) December 30, 2021